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The Assessing Officer, Textiles Committee v. M/s. Premium Suiting Pvt. Ltd. & Another

Civil Appeal · 2026 INSC 1158Decided 26 Oct 2026
Civil Appeal No. 785 of 2016
Justice S.V.N. Bhatti · Justice N.V. Anjaria

Background

The Textiles Committee demanded cess from a fabric processor that bleaches and dyes man-made fabrics on a job-work basis for powerloom and handloom manufacturers. The Appellate Tribunal upheld the demand, reasoning processing amounted to "manufacturing," but the Allahabad High Court quashed it, holding that job-work processing doesn't strip the fabric of its exempt powerloom or handloom origin.

Decision Breakdown

The Supreme Court upheld the High Court. Since "manufacture" is undefined in the 1963 Act, the Court declined to import the broader Central Excise Act definition, applying the term in its ordinary sense instead. The processor merely processes fabric already manufactured by exempt powerloom or handloom units and returns it: it does not itself manufacture textiles, so no fresh cess liability arose.

Lesson Learnt

When a tax statute uses an undefined term, courts give it its ordinary meaning rather than borrowing a more expansive definition from an unrelated law: tax authorities cannot stretch liability that way.

Official source (sci.gov.in)View Judgment (PDF)

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The Assessing Officer, Textiles Committee v. M/s. Premium…